The Double Failure Pattern
Let's continue one of the secondary themes from
last weeks article:
One way I love to see this set up is via a double failure pattern.
This can display in many ways, but essentially involves a significant price
movement in one direction which sucks in the masses of traders; pushing once and
failing, then pushing a second time and again failing.
It really plays with their emotions. The first move gets them excited about
great profits. The first failure worries them. The second move relieves that
pressure and again gives them hope. The second failure destroys them.
We of course aim to enter in the opposite direction, at the point of their exit,
if not before.
The key is context. The pattern must provide some kind of significant move, such
And ideally the pattern should be operating against your market bias, or be one
that changes your bias.
Let's look at some examples across different timeframes.
And it even applies down at the scalping level where I trade (1-3 range or 20